Answer ... The German rules governing arbitration are contained in the Tenth Book of the Code of Civil Procedure, Sections 1025 and following (the ‘German Arbitration Act’). An official English translation of the Code of Civil Procedure can be found at www.gesetze-im-internet.de/englisch_zpo/index.html.
Following the concept of the UNCITRAL Model Law on International Commercial Arbitration, the German Arbitration Act generally applies only to arbitral proceedings whose seat is located in Germany (Section 1025, paragraph 1 of the Code of Civil Procedure). By way of exception, some specific provisions are also applicable to foreign arbitral proceedings, such as those on the assistance of state courts pursuant to Section 1050 of the code. The enforcement of foreign awards is dealt with in Section 1061 of the code.
Answer ... In accordance with the UNCITRAL Model Law, the German Arbitration Act distinguishes between arbitration proceedings seated in Germany on the one hand and those with their seat abroad on the other. However, no distinction is made with regard to the nationality of the parties involved - that is, the German Arbitration Act does not distinguish between domestic arbitral proceedings involving German parties only and international arbitral proceedings involving foreign parties.
Answer ... The German Arbitration Act largely incorporates the UNCITRAL Model Law. However, some notable exceptions exist, including the following:
- stricter formal requirements for the arbitration agreement – this must be concluded in written form, a requirement which is particularly strict where consumers are involved;
- the right to request a decision from a national court on the admissibility of arbitration prior to the initiation of proceedings; and
- greater power of state courts to enforce interim relief.
Further modifications of lesser importance include the following:
- an obligation to apply the substantive law of the country with which the subject matter is most closely connected, in the absence of a choice of law clause;
- the time limits for the initiation of annulment proceedings; and
- an explicit provision that, unless the parties agree otherwise, the decision on the costs of the tribunal shall be based on the outcome of the proceedings.
Answer ... The German Arbitration Act provides for flexibility. Hence, many of its provisions can be modified by the parties by mutual agreement. Some notable examples of mandatory provisions concern:
- waiver of the right to challenge the award (which cannot be excluded in advance); and
- the tribunal’s obligation to treat the parties equally and to grant them the right to be heard.
Answer ... There are no plans to amend the German Arbitration Act. The most recent change was enacted in 2013, when a provision was added recognising the conclusion of an arbitration agreement through bills of lading. However, the rules of the German Arbitration Association were recently revised with effect as of 1 March 2018.
Answer ... Germany has been a signatory to the New York Convention since 30 June 1961. It has made only one reservation: with respect to Article I, paragraph 1, and in accordance with Article I, paragraph 3 of the New York Convention, Germany will apply the convention only to the recognition and enforcement of awards made in the territory of another contracting state.
Answer ... Germany is also a signatory to numerous other international arbitration treaties, including:
- the European Convention on International Commercial Arbitration;
- the International Centre for Settlement of Investment Disputes Convention; and
- the Energy Charter Treaty.
In addition to these multilateral agreements, Germany has concluded various bilateral treaties, mainly concerning trade relations or investment protection. Some of these also include certain arbitration-related regulations, which will generally prevail over the national provisions in case of any conflict (see Section 1064, paragraph 3 of the Code of Civil Procedure). However, the practical relevance of such cases is limited, since they will arise only where bilateral treaty contains norms that are even more favourable than those provided by the German Arbitration Act.